Beyond renewables: How to reduce energy-related emissions by measuring what matters

Despite the uptick in renewable energy usage, global emissions have steadily increased. World Resources Institute's John Woolard argues that commitments to 100% renewables will not alone curb the worst impacts of climate change.

The Albany Wind Farm in Western Australia. As the country moves to increase the share of renewables in its energy mix, it will need to rely on storage technologies to keep the electricity system reliable and resilient. Image: Juan Alberto Garcia Rivera, CC BY 2.0

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In the 27 years since the 1992 Rio Climate Summit, the use of renewable energy has increased dramatically and the efficiency of energy use and production has soared. Yet global carbon emissions continued to rise. What happened? Why has no progress been made in reducing carbon emissions despite huge improvements in efficiency and rapid growth in the use of renewable energy? What can be done to achieve meaningful reductions in energy-related emissions of the carbon dioxide heating the planet?

To achieve the rapid emissions reductions needed to avert the worst effects of climate change, policy makers, market regulators, utility companies, corporate energy buyers and climate activists must focus relentlessly on driving down a simple metric: the amount of carbon dioxide emitted per unit of electricity.

Renewable energy, primarily solar and wind, is a technology success story. By the end of 2017, global installed capacity of renewable power topped 1,000 gigawatts (GW), an amount roughly equal to the total installed capacity of the United States (Figure 1). China accounted for 45 per cent of global investment in renewables in 2017and leads the world in installed capacity (334 GW), followed by the United States (161 GW) and Germany (106 GW).

Stronger government mandates, lower costs and greater demand from energy buyers are increasing the use of renewable energy. Since 2014, U.S. companies have procured a total of 15.5 GW, making corporate buyers a significant contributor to renewable procurement at almost 10 per cent of total U.S. renewable capacity.

The increase in the use of renewable energy—and the commitment by some U.S. corporations to use only renewables—is laudable. But despite the massive increase in renewable generation in the United States and elsewhere, the world has not significantly reduced annual emissions, with the result that cumulative emissions have increased steadily since 1992 (Figure 2). Over the last decade, global emissions from fossil fuels averaged 34 gigatonnes of carbon dioxide (GT CO2) per year. If current trends continue, the world is set to breach the carbon dioxide threshold of 450 parts per million before 2040. The surge in renewables notwithstanding, continuation of the current trajectory will lock in at least 2 degrees C (3.6 degrees F) warming in the next few decades—with catastrophic consequences (Carbon Brief 2016).

Moreover, new research suggests that the 2 degree C ceiling is too high to be safe. The 2018 report of the Intergovernmental Panel on Climate Change (IPCC) concluded that limiting average global temperature increases to 1.5 degrees C is imperative to avoid major disruption of the global climate system. Although doing so is technically possible, it will require major and immediate transformation of societies and economies, including a rapid ramp-up in generation of low- and zero-carbon electrical power. While technological improvements are crucial, the narrow window for action means that the world must fully utilise available low-carbon technologies in the years immediately ahead.

What’s going on?

How can carbon emissions be increasing if the use of renewables has soared? Management consultant Peter Drucker famously noted that “what gets measured gets managed.” The amount of carbon dioxide emitted each year has remained high because countries—and cities, states, utility companies and corporations—have failed to measure and manage their carbon dioxide emissions.

Renewables are important, but all of the wind and solar additions over the last decades amount to just 3.6 per cent of worldwide energy production (BP 2017). Investment of more than $1.4 trillion has not offset the growth in worldwide energy from fossil fuels.

Total zero-carbon energy is a much bigger success story than renewables alone, accounting for 14.8 per cent of the global energy mix. Indeed, nuclear and hydropower produce three times the zero-carbon power of renewables. For example, if we assume that nuclear power substituted for or “displaced” electricity with the average carbon dioxide content per megawatt hour (MWh) in the United States, it has avoided 8 gigatonnes (GT) of carbon dioxide since 2000. By comparison, wind and solar combined resulted in just over 1 GT of avoided emissions. Solar contributed less than 0.2 GT, less than the carbon dioxide benefits achieved by switching from coal to natural gas in the past decade (Figure 4).

How can this pattern be changed?

Solar and wind power represent important renewable sources of energy, produced at near-zero marginal cost. Their adoption should continue to be aggressively promoted. But policy makers also need to understand the limitations of renewable energy, including the challenges associated with the variability of their output.

The energy produced by wind and solar is intermittent. Without back-up from other sources, wind and solar cannot provide the 24/7 reliable power that people expect, and modern economies require. As a result, other generation sources, energy storage and demand response capabilities are needed to provide the power at times when wind and solar are not available. Policy makers, regulators, utility companies, corporate energy buyers and climate activists must be aware of this.

Because renewable sources of energy are not consistently and reliably available, even companies and consumers that purchase all of their energy from renewable sources often rely on fossil fuel to meet their needs for consistent, reliable power. Their actions help decarbonise the energy supply—but they only partially address the larger challenge of decarbonisation of the power system. And managing this diversified power system requires new tools and approaches.

Setting the right goal matters: lessons from Germany and the United Kingdom

The contrasting experiences of Germany and the United Kingdom yield important lessons for policy makers about how to reduce emissions. Germany focused on renewable energy, but its carbon emissions are significantly higher than the European average. The United Kingdom used carbon emissions per unit of energy across the national grid as its key metric and is now a leader in the industrial world in emissions reduction.

Germany’s renewable energy expansion also resulted in higher electricity prices. At $0.331/kWh, power prices in Germany are 46 per cent higher than the EU average and 61 per cent higher than the UK ($.206/kWh, $1.12 USD to Euro). Extended periods of calm winds and overcast days—known as the Dunkelflaute (dark doldrums)—keep fossil capacity active, in part because Germany committed to closing its nuclear plants after the Fukushima nuclear accident, leaving it dependent on coal to back up renewables.

The German grid relies heavily on the cheapest and dirtiest plants to balance its renewable energy sources—plants powered by lignite coal. As a result, Germany has seen rising carbon intensity alongside rising renewable penetration, forcing it to lower its 2020 climate goals, which it is no longer able to meet. Electricity production in Germany from coal has not changed meaningfully, falling from 262 terawatt hours (TWh) in 2010 to 240 TWh in 2017. The total energy from additional renewables (113 TWh) since 2010 will not offset the loss of zero-carbon energy production from the retirement of Germany’s nuclear plants (140 TWh). Germany is now a country with high renewables, high carbon emissions, and high energy rates. The rest of the world should study its experience closely.

The situation in Germany lies in dramatic contrast to the situation in the United Kingdom, which has focused explicitly on carbon dioxide reduction and maintained a broad portfolio of power generation options, including nuclear, wind, solar, and natural gas. The United Kingdom has displaced coal with a combination of new renewables and natural gas. In 2016 its carbon dioxide emissions fell to 240 grams per kWh— less than half of Germany’s and 47 per cent lower than its own emissions in 2012 (Loughran 2017). The United Kingdom used carbon emissions per unit of energy across the national grid as the key metric and thereby reduced emissions much more than any other industrial country. Germany focused primarily on renewables and has significantly more carbon in its power supply than the rest of Europe.

Reducing carbon through a broad, technology-neutral portfolio

Setting goals that include renewables while specifically targeting reductions of carbon emissions per unit of energy across the grid as the primary metric of success is critical if efforts at decarbonizing the power supply are to be scaled up. As the UK example illustrates, a broad portfolio encompasses significant investment in energy efficiency, wind, solar, nuclear, a robust transmission grid, and carbon capture and storage (CCS).

What are the most effective ways to deliver cost-effective, clean, reliable power? Taken together, the seven actions below can produce meaningful results.

1. Increase energy efficiency

Energy efficiency represents the single largest potential contributor to global emissions reduction, according to the International Energy Agency (IEA 2017). It should be a key part of the global energy strategy, for several reasons:

It avoids the need for increased energy, capacity and grid services, making it the least expensive way to decarbonise at scale.

It can reduce carbon dioxide emissions by billions of tonnes.

A dramatic example of the power of energy efficiency is lighting. In 2017 the United States passed the milestone of 1 billion LED and CFL lights installed, avoiding 142 million tonnes a year of carbon dioxide emissions, at a cost of about $7 per ton of avoided carbon dioxide. In contrast, the cumulative installed capacity of rooftop solar reached 8,000 MW in 2017, saving 8 million tonnes a year of carbon dioxide, at a cost of $360 per ton. Lighting efficiency thus yielded almost 18 times the avoided carbon dioxide, at about 2 per cent the cost per ton of rooftop solar.

Google provides another example of the power of energy efficiency. Its data centers now use 50 per cent less energy than the average data center, according to the company. Google also developed an improved chip, the TPU, which performs 83 times better than standard CPUs. The new chip allowed Google to reduce power consumption at its data centers by a factor of 30—far exceeding the effect on Google’s carbon footprint of all of the company’s renewable energy purchases.

2. Harness the power of markets to drive down emissions

Coal generation is the largest single source of carbon emissions in the United States. It needs to be eliminated quickly. The primary driver forcing coal plants to be taken out of service has been intense price pressure from renewables and natural gas. Competitive generation markets prioritise the most cost-effective electricity suppliers to be contracted first, which has pushed many coal plants out of the system since wind, and natural gas plants are lower cost sources of power. (PJM, ERCOT). Improving the efficiency and interconnections of the transmission system further enhances the ability to drive more costly coal plants offline and increases the share of renewables as a source of energy, backed up by cleaner natural gas plants.

3. Continue to build wind and solar plants at significant scale

Wind and solar are now very inexpensive sources of energy, with the price of solar having decreased 85 per cent since 2009 and the cost of wind power dropping 50 per cent. Portfolio models indicate that solar and wind can provide up to 80 per cent of the zero-carbon energy in many grids if integrated properly with dispatchable assets such as hydro, natural gas, and electrical storage (Frew, Lazard, E3 and others). When integrated intelligently with a full portfolio of generation assets for reliability, these abundant and renewable sources of energy are critical building blocks for a decarbonised grid.

4. Recognise that renewables can’t do it alone

Wind and solar produce power at almost zero marginal cost, but produce power only when there is sufficient wind or sun. Until energy can be efficiently stored, additional generation sources and management approaches will be used to ensure that power is available around the clock. For this reason, commitments to 100 per cent renewable use, while valuable for sending market signals to increase investment in renewables, will not in themselves achieve the emissions reductions needed to avert the worst impacts of climate change without alternative sources that provide power when these resources are not available.

Continued investment in reducing the cost of energy storage, such as batteries, pumped hydro and thermal, can help integrate renewables and reduce the amount of dependence on natural gas for integration. Storage cost scales linearly with the hours required and is currently competitive with natural gas plants for two- to four-hour dispatch (Lazard 2018). These costs have decreased significantly, 76 per cent since 2012, and if this trend continues, it will allow storage at six-hour duration to be competitive, allowing for six hours of energy to be moved within a single day or across days. To provide for long-duration energy dispatch across extended periods of low solar and wind, we need to invest in driving the cost of storage down by a factor of 100, so that it can dispatch for weeks at a time. Until then, selective use of natural gas at low-capacity factors will likely provide this service to enable the integration of significant amounts of renewables.

The experiences of three large tech companies illustrate the challenges of renewables as a fully reliable power source. In 2017, Google and Apple announced that they had reached the milestone of purchasing 100 per cent of their power from renewable sources; Amazon has declared its intention to reach its 100 per cent renewable energy goal. These efforts represent only a start, however, as all three companies’ data centers continue to rely heavily on grids with significant carbon footprints. As Google approached its 100 per cent renewables goal, the company acknowledged its continued dependency on a grid with considerable carbon content. “For us, reaching 100 per cent renewable energy purchasing on a global and annual basis is just the beginning,” Google said in a statement. “In addition to continuing to aggressively move forward with renewable energy technologies like wind and solar, we will work to achieve the much more challenging long-term goal of powering operations on a region-specific, 24/7 basis with clean, zero-carbon energy.”

5. Keep operating existing nuclear plants—and keep the door open to new ones

The largest portion of zero-carbon power in the United States comes from nuclear plants. Were these plants, which together have 100 GW of capacity, to be closed, the United States would need to construct 300 GW of new solar and wind plants (which produce energy just a third of the time) and integrate them with hydropower, natural gas plants or storage at durations 100 times longer than anything on the market.

It could take 10 years or more to build enough renewable energy plants to replace an existing zero-carbon power source—a lost decade when the world is in a race against time.

This is the reason that the Union of Concerned Scientists, a foe of nuclear proliferation, recently issued a report urging the U.S. to continue to operate its fleet of nuclear power plants rather than allowing them to be squeezed out by cheaper natural gas.

It is time to initiate an open discussion of the possible role for new nuclear power. Given the rapidly closing window for action—the IPCC says that the world must reach zero net emissions by 2050 to hold warming below the critical 1.5 degree C threshold—the world needs additional zero carbon electricity capacity. Nuclear power adds to the diversity of the generation portfolio and can deliver power in areas with low renewable potential.

Advances in technology mean that costs have fallen and safety has improved significantly. Countries that have done nuclear well include France, Sweden, the UK and more recently China. In South Korea new plants are being built at less than one-third the price in the United States.

There are divergent views on the role additional nuclear power will play in stabilising the climate. One thing we know is that it remains a key component in many peer-reviewed climate models, most importantly the ones used by IPCC. For example, in the fifth IPCC report, nuclear is assumed to increase approximately tenfold by the end of the century. The question of public acceptability, nuclear waste, storage and cost need to be addressed by any nuclear technology. The imperative of climate change means we must look at options to continue to build nuclear power in the United States.

6. Create a robust transmission network that allows for a more diversified portfolio of power sources

Transmission enables a power system to share capacity, benefit from the geographic diversity of renewables and draw on a broader portfolio and solution set. To borrow a concept from financial management, a portfolio of uncorrelated assets, together with a robust, interconnected network, can help move the power system toward the lowest-cost low-carbon solution.

It is critical to look at the benefits of the geospatial distribution of wind/solar and the benefits of connected grids with dispatchable assets (Fitzpatrick et al. 2018). A robust grid facilitates the efficient flow of power, forcing uneconomical generators to shut down, and it increases the ability to add a larger renewable portfolio and improve reliability.

7. Ramp up investments in frontier technologies, including CCS

While the solution set for a rapid transition to a low-carbon energy supply must be based on existing technologies (it would be foolhardy to bet humanity’s future on technologies that haven’t yet been proven) these are unlikely to be enough. It’s therefore crucial that societies rapidly ramp up public and private investment in emerging and frontier technologies.

Perhaps the most important of these is CCS, carbon capture and storage. For millennia before the industrial revolution, atmospheric concentrations of carbon dioxide hovered around 250 ppm. In 2016, concentrations passed 400 ppm and given current trends are likely to reach 500 ppm—double pre-industrial levels—within 50 years. Bringing carbon dioxide concentrations back within safe bounds will therefore require massive and rapid carbon removal. One option for carbon removal is with landscape restoration. Reintroducing trees and bushes to degraded landscapes pulls carbon from the air, fixing it in plants and soils, while providing a myriad of other benefits, including better water retention, improved livelihoods and cooling shade.

But given the likelihood that atmospheric carbon levels will significantly overshoot safe levels, it appears increasingly likely that high-volume direct air capture CCS—electrically powered machines that pull carbon from the air and sequester it in the ground or in products such as cement — will be needed in the not too distant future. Research to greatly reduce the costs of direct air CCS, and measures to greatly increase the availability of low- and zero-carbon electricity to power it, are therefore imperative to ensuring an effective response to the climate challenge.

Conclusion

The solutions to a lower-carbon future are available. The world does not have the luxury to wait to implement them. We must move quickly to move away from carbon-intensive power, managing and measuring our power by its carbon pollution. Reducing emissions requires the adoption of a low-cost, balanced energy portfolio that can be built quickly at reasonable cost. All attributes of alternative energy sources—including carbon emissions, capacity and reliability—need to be considered in assembling the portfolio. Natural gas plants will play an enabling role as flexible assets in helping to balance the grid with substantial renewables and enable rapid deployment. In addition, other zero-carbon assets, such as nuclear and CCS, integrate well with a renewable portfolio, decreasing the need for gas and storage.

Addressing climate change will require trillions of dollars in expenditure, coordination across all countries and the deployment of multiple technologies at scale. To put a person on the moon, the United States set a clear objective and then deployed all resources available to achieve it. The world will not solve a problem as complicated and formidable as climate change without setting an equally clear objective—reducing carbon dioxide emissions to near zero by 2050 and engaging all resources (wind, solar, energy efficiency, storage, nuclear, CCS and robust transmission) at significant scale to meet it.

John Woolard is a senior operating partner at Activate Capital and Senior Research Fellow at World Resources Institute (WRI). This post is republished from the WRI blog.

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